High correlation between economy and home price growth
There is a relatively high correlation between the city-state’s home price increase and real economic growth...
The supply of private houses available for sale in Singapore is expected to surge by over two-fold in the next one to two years, revealed Minister for National Development Lawrence Wong on Tuesday (14 November).
In a report by the Business Times, he said most of the housing pipeline will come from redevelopment projects built on sites acquired via en bloc sales, in addition to residential plots acquired by developers through the Government Land Sales (GLS) programme.
This means there is ample supply to meet demand, so Singaporeans are advised to “do their homework carefully” before buying a residential property.
For instance, Wong noted that the overall vacancy rate for private houses here has surpassed eight percent for nearly two years at a current rate of 8.4 percent. The last time that such figure had remained at this high level was in 2005.
“What this means is that, in terms of actual physical units, there are currently more than 30,000 vacant private housing units — all still looking for occupants. To put things in perspective, this is more than the total number of dwellings in the whole of Bishan today.”
He said this during the 58th anniversary dinner of the Real Estate Developers’ Association of Singapore (REDAS), where he reiterated a warning to developers regarding their high land bids.
Wong believes that such high cost might force home builders to cut corners on the quality of their residential units in order to recoup their large expenses.
“From time to time, we do get feedback about developers who do not meet the quality standards we expect of them.”
As such, the authorities are looking to impose more measures to compel property developers with “poor track record” to follow higher standards of quality.
“For example, we may impose a licence condition for them to obtain Quality Mark certification for their projects. We may even disallow these developers from launching units for sale until we can be certain that they are committed to meeting these standards.”
This article was edited by Keshia Faculin.